The V&A Waterfront is proud to be awarded five Green Star Ratings from the Green Building Council South Africa (GBCSA) this week.

GoIndustry DoveBid SA (GoDove) has announced the second phase of its contract awarded in 2013 to dispose of more than 60 Telkom properties nationwide.

Auction Alliance will take a well-situated Franschhoek Barn offering an excellent redevelopment opportunity to the auction floor during its multiple commercial auction to be held on April 13

Friday, 23 April 2010 02:00

Makhado centres take top honours

 

RETAIL centres in Makhado (Louis Trichardt) took top honours at the Auction Alliance property sale on Wednesday, with the 40 lots under the hammer fetching good prices.

Friday, 25 September 2009 02:00

Kimberley centre the star of the sale

 

A RETAIL and office block in Kimberley will be the main attraction at the Savile Row property auction next Thursday, when the Bedfordview mansion of Lolly Jackson comes under the hammer as well in what appears to be a more optimistic market.

'Still lots of buyers' for the sale that has been dominated by retail buildings in small towns.

Tuesday, 25 September 2007 02:00

Building cost inflation up

Commercial building cost inflation rose to 29% in the second quarter of 2007 from 16% during the first quarter of the year, the FNB Commercial Property Finance Property Building Cost Index showed on Tuesday.

Construction IndustryThe index reflects the average building cost per square metre, as priced by building contractors when winning tenders. As such, it reflects the combination of contractors' input costs, their own pricing power which varies over time due to market conditions, and the standard of the property developments in question.

While the retail and office property building costs indices have been showing increases, the industrial property sector has seen some tapering off in its inflation rate, the index showed.

The retail property sub-index showed a year-on-year building cost inflation of 39.5% for the second quarter, followed by office space with 26.2% and industrial space inflation of 13.9%.

"One should not read too much into the tapering in building cost inflation in the industrial property sector. Its index showed strong growth in 2006, running a bit counter-cyclically to the other two sub-indices, and was probably due for a breather coming off a high base," said John Loos, FNB property strategist.

He noted that the renewed surge in the index broadly tracked the producer price index for building materials, which experienced a lull in 2006 before seeing its inflation rate climbing as 2007 approached.

"The rise suggests a significant input cost push effect, especially as it comes at a time when there exist a feeling that especially office rentals still need to adjust further upwards in order to make many more projects viable, and in so doing alleviate a vacancy rate," said Loos.

 

 

Commercial building cost inflation slowed to 16% year-on-year by the first quarter of the year, from a peak of 37% in the third quarter of 2005, the FNB Commercial Property Finance Residential Building Cost Index showed on Thursday.

Construction IndustryThe index reflects the average building cost per square metre, as priced by building contractors when winning tenders.

As such, it reflects the combination of contractors' input costs, their own pricing power which varies over time due to market conditions, and the standard of the property developments in question.

The mild decline in building cost inflation in the commercial property sector should perhaps not be too surprising. Interest rates have been rising, and according to the Investment Property Databank (IPD), 2006 saw a mild decline in total commercial property returns from a peak of 30.1% in 2005 to 26.7%, said John Loos, FNB's property strategist.

"This may well have exerted some mild downward pressure on the growth in pricing power of contractors," he said.

Moving into the sub-sectors of commercial property, the relative building cost inflation rates of the industrial, office and retail property sectors at present appear somewhat related to the relative strength of these property sub-sectors, he said.

Industrial property, the place where all the action is, showed first quarter year-on-year building cost inflation of 40.8%.

This sector has shown a steady surge in building completions in recent times, has very low vacancy rates and according to the IPD showed the highest total return of the sub-sectors in 2006 to the tune of 31.1%.

The sector overtook the retail property sector as the star performer back in 2005, Loos said.

Retail building cost inflation has tapered off for some time, but still showed a respectable 17% year-on-year inflation rate in the first quarter.

"This sub-sector is believed to be leading the commercial property cycle, and although total returns for retail property were estimated at a still-healthy 27.4%, it is believed that there will be further decline this year and next on the back of a slowing consumer demand growth rate," according to Loos.

He noted that office space building cost inflation slowed to a mere 1.1% year-on-year in the first quarter.

"The office sector is the laggard in the commercial property cycle, and continues to surprise on the downside. Vacancy rates have been declining for some years, and on a national basis (The South African Property Owners Association) estimates of A and B-grade office vacancies are just above 5%," he said.

However, returns are the lowest of the 3 major sub-sectors at 24.5% in 2006, and building activity has not yet surged, as one would anticipate it to do in the near future, Loos said.

 

 

 

 

Monday, 07 June 2004 02:00

Claremart to auction 71 Loop Street

A commercial building in Loop Street is to go under the hammer.

Most Popular

Exemplar REITail Acquires Katale Square Shopping Centre

Sep 23, 2019
 JASON MCCORMICK
Real estate investment trust, Exemplar REITail, has acquired Katale Square shopping…

Mall of Africa Celebrates Launch of New Generation Pick n Pay Store

Sep 23, 2019
 MOA PNP  1
Today Mall of Africa welcomed one of South Africa's biggest grocery retailers to the…

Grit Real Estate financial results for the year-ended 30 June 2019

Sep 30, 2019
 BRONWNY CORBETT
London Stock Exchange listed Grit, the only listed Africa-focused income distribution…

4AX listed Heartwood Properties reveals positive financial results

Sep 23, 2019
 JOHN WHALL
Commercial property development company, Heartwood Properties , has revealed a 30%…

Reserve Bank keeps repo rate unchanged

Sep 23, 2019
 LESETJA KGANYAGO
 South African Reserve Bank Governor Lesetja Kganyago on Thursday said this is in line…

Please publish modules in offcanvas position.